GSPartners
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Volume XXI | No. 31 | August 20, 2014
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KEY RATE INDICES
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Prime Rate
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3.25%
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1 Month LIBOR
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0.16%
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5 Yr US Treasury
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1.63%
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5 Yr Swaps
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1.79%
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12-MAT
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0.12%
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3 Month LIBOR
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0.23%
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10 Yr US Treasury
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2.43%
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10 Yr Swaps
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2.58%
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11th Dist COFI
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0.67%
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6 Month LIBOR
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0.33%
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30 Yr US Treasury
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3.22%
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| | | Transaction Description: | | $45,000,000 Non-Recourse Regional Retail Construction Financing in Suburban Colorado GSP arranged $45,000,000 in first mortgage debt on a to-be-built retail center in suburban Colorado anchored by a movie theater, grocery store, and fitness center. The non-recourse loan does not require a repayment guarantee and all other guarantees are limited to a capitalized entity. The subject was 75% pre-leased upon closing; priced at 30 Day LIBOR plus 3.75% with a 4.25% floor. The three year initial term is Interest Only for the first two years before rolling to a 25 year amortization schedule for the third year and two one-year extensions. Leverage capitalization terms are confidential. |
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| | | Transaction Description: | | $12,000,000 Four-Tenant Retail Refinance GSP successfully placed a $12,000,000 refinance of a four-tenant retail property in the prime “Gaslamp” District of San Diego. Located a short walk from the San Diego Convention Center and waterfront, this property sits in the heart of the entertainment and business district of downtown San Diego. Consisting of over 18,000 square feet of street level retail and 46 parking spaces, the subject property hosts stable, successful tenants with strong year over year sales. GSP marketed this loan to banks, life insurance companies and Wall Street/CMBS originators to match the unique needs of our client while securing a very high loan dollar per square foot. Specific loan terms for this ten-year loan are confidential. |
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| | | Transaction Description: | | $3,250,000 Construction Loan for Six For-Sale Luxury Condo Units in Westwood, California Jonathan Lee successfully placed the construction financing for a ground-up six unit luxury condominium property in Westwood, California. The Sponsor purchased the entitled land in 2012 all cash and re-designed the building, spending over a year obtaining required approvals. The 18 month construction term is priced at LIBOR plus 3.5% and was sized to 75% of total cost. Imputed equity was factored in to a 65% of value metric. |
Challenge: The Sponsor required high leverage for a for-sale development and was not seeking to invest additional cash equity into this project. Pro-forma sales were difficult to comp given the older product in the area. The high price per foot added to the comparable challenge. |
Solution: GSP supported the leverage request by highlighting the Sponsor’s and the Contractor’s successful development history with similar project types. By canvassing the market and demographic data, a sales pro-forma for the finished project was developed by GSP, reviewed and accepted by the Appraiser. The estimated demand and price point for new product was independently supported by the MAI appraiser. |
| | Rate: LIBOR + 3.50% | | Term: 18 Mnths+ 1-Six Mnth Ext | | Amort: Interest Only | | LTV: 65.0% | | LTC: 75.0% | | Recourse | | Lender Fee: 0.5% | | Advisors: Jonathan Lee, Adam Candler |
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| | | | Non-LifeCo Forward Rate Lock From $1,000,000 GSP is placing stabilized assets with a non-Life Insurance portfolio provider funding forward rate locks to 12 months for loans from $1,000,000 to $10,000,000. Multifamily and multi-tenant commercial assets in major metro-markets are leveraged to 75% of appraised value for loan terms to 15 years, amortized over a 30 year schedule. Flexible step-down prepayment options may be structured to match a borrower’s investment strategy. A 2% refundable deposit is required for locks in excess of 60 days as is a small spread-premium based on loan and lock terms. |
| | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com | | | Speakers Corner - Crowdfunding Today | Founding GSP Partner Gary M. Tenzer will be moderating the panel “What It's Like to Crowdfund a Deal as a Sponsor” at the upcoming UCLA/Ziman Crowdfunding Conference on August 27th. The 8am event will be held at the Covel Commons on the UCLA Campus. Conference agenda and registration information is available on-line and discounted registration (promo code ZIMANVIP2014) for a $45 savings is available for a limited period of time. | | | In The Press | The Five GSP Principals were recently interviewed by GlobeStreet on capital driving the Commercial Real Estate Market. The article with GSP’s Managing Members feedback and various quotes are available on-line. | | | Pascale’s Perspective | Fed Prepares for “Liftoff”; Credit Spreads “Hopefully are Stabilizing”…… Today’s release of Fed meeting minutes indicate that a rate hike might happen earlier than mid-2015. Minutes indicate a debate among the governors as to how sustainable the economic recovery is. Although the headline unemployment number is 6.2%, the more “dovish” Fed governors are concerned with labor participation, part-time vs. full-time, weak wage growth, etc. The problem is that the “new normal” of the post Great Recession is stubbornly not turning out like previous recoveries. Some Fed governors may be resigned to the fact that the Fed has exhausted its remedies and is in danger of stoking inflation. They fear that if the Fed waits too long to raise rates, that they may not be able to “get ahead” of inflation…… Credit Spreads – CMBS spread widening slowed this past week. The recent dislocation may indicate that bond buyers are differentiating between pools, depending on credit quality as certain pools were considered to be more risky due to deteriorating underwriting standards. Another interesting harbinger of credit widening has been huge outflows of monies from high yield funds which buy riskier bond assets…. A huge supply looms with $21 billion in new CMBS issues set for September and October. In previous years, August has sometimes been “choppy” as senior traders and money managers are on vacation, hopefully they come back rested and ready to take on this new supply… …stay tuned…. David R. Pascale, Jr. |
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©2014 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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